TValue Products

### Can TValue compute totals for fiscal year ends?

Yes. In TValue, you have the option of changing your year-end to your fiscal year-end so your totals can tie out to your accounting period. TValue defaults to show totals based on a calendar year-end (e.g. December). You can easily choose to display these totals based on a different fiscal year-end.

**To change the Fiscal Year**

For TValue 6

- On the Amortization Schedule ribbon, choose Fiscal Year from the Settings menu button or from the Settings group to display the Fiscal Year setting.
- Click the month you want to be used for the Fiscal Year-End.
- If you would like this fiscal year-end to be your default for all future schedules, click on the Defaults icon and click Save.

For TValue Online

- On the Amortization ribbon, choose fiscal year or from the more menu choose fiscal year.
- Click the month you want to be used for the Fiscal Year-End.
- TValue Online will save your last setting for all future schedules. If your next schedule is a December year-end, you will have to change the fiscal year.

All of your amortization schedules will now have your fiscal year totals match to your accounting period.

### Can TValue handle deferred payments, interest only payments, stepped up or stepped down payments?

TValue has the flexibility to handle pretty much any irregular payments. You can do deferred payments that are either part of the yield or not. One of the features in TValue is the Special Series that allows you to do interest only payments, percent step or dollar step payments to structure the lease.

### Can TValue calculate the interest on a Commercial Loan?

The answer is yes. The key is the settings. Commercial real estate lenders commonly calculate loans in three ways: 30/360, Actual/365 (aka 365/365), and Actual/360 (aka 365/360). All three of these calculations can be done in TValue 6 and TValue Online. TValue 5 does not do the 30/360.

The Actual/360 or 365/360 is the most common commercial loan. In TValue, you want to have the Compounding Period or Computation Interval set to Exact Days and the year length to 360 days. For the Actual/365, you want to have the Compounding Period or Computation Interval set to Exact Days and the year length to 365 days. For the 30/360, each month is 30 days and the 31st days disappear and February is 30 days. You can set the 30/360 under Date Counting in both TValue programs.

### How do I calculate a loss on a TDR?

Calculating the TDR loss using appropriate present value methodology is a matter of developing two amortization schedules and calculating the difference between the two resulting loan balances. TValue is an excellent tool that makes it simple to handle these calculations. The first schedule will be the actual modified or restructured loan (TDR) based on the loan's carrying value. It is important that this schedule agrees with the actual restructured note. The second schedule will use the actual cash flows from the modified loan or TDR, adjusted for any rates changes or interest only payments, and then calculate a present value (PV) of the future cash flows at the effective or original interest rate. TValue amortization software is a very flexible product both for modeling changed cash flows due to the restructuring and then performing the present value calculation of the future cash flows at the effective rate. TValue can handle any type of modification including interest only payments, rate changes, balloons, and more.

There are a handful of modifications that are being done to help the debtor that cover most of the TDRs. These modifications can include either one item or a combination of items and can include:

- Lowering the overall interest rate for the full term
- Doing interest only payments at a lesser rate for a period, e.g., 6 to 24 months, to reduce the initial payments and then amortizing the remaining loan at a discounted rate or the effective rate
- Creating a predetermined rates step up, e.g., 3% for 12 months, 4% for 12 months, and 5% for the remaining term, to reduce the initial payments in the early years
- Lowering the interest rate for a short term, e.g., 2 to 5 years, amortizing the loan over 30 years, and ballooning the loan at 10 years
- Increasing the term to lower the payments

Determining the best deal structure that both allows the debtor to handle the payments and allows the creditor to minimize the loss is critical. Doing the "what ifs" calculations is invaluable to understand the magnitude of the loss before closing the loan. TValue software is a program that can easily and quickly do the "what if" calculations. Different deal structures can be modeled in minutes and, similarly, the present value calculation(s) can be performed on a "real-time" basis during active restructuring negotiations.

### Can TValue handle variable rate changes?

Yes. All versions of TValue amortization software will handle variable rate loans. Normally, loan payments change as the rates change and the term stays the same. See the Blog on our website for the process on "Handling Variable Rate Changes” using TValue.

### Can TValue software calculate a balloon payment?

TValue software can easily handle balloon payments. There are a couple of different scenarios that would need a balloon. If you had a series of payments and you wanted to know the final payment, you could solve for the “unknown” and solve for the final payment. If you wanted to shorten a loan and pay it off or have a balloon after 10 years, you could solve for the payment amount for the full term, e.g. amortize the payments for 360 payments for a 30 year mortgage. Once you have the payments, you can shorten the terms to the balloon period, 10 years, and change the number of payments to 120 then calculate for the final balloon payment.

### Does TValue software compute net present value (NPV)?

TValue software can calculate the present value or net present value. A common present value calculation is to compute the current value of the remaining payments of a payment stream. To do so with TValue software, you first enter the nominal annual rate and then put “U” for unknown for the Loan amount on the present value (valuation) date. Then enter the remaining payments (cash flows) after that date. When you are calculating a net present value, only the cash flows that remain after the valuation date are used in the calculation.

### Does TValue software handle irregular payment periods?

TValue software is an excellent program to handle irregular payments and will automatically make the proper allocation between interest and principal for each payment. You can either enter the irregular payments one by one or you can setup a normal payment schedule, then you can click the Expand icon and then edit the individual dates or amounts including a payment of zero.

### How do I enter an adjustable rate loan?

After entering the basic loan information, e.g. Compounding Period, Nominal Annual Rate, Loan, go to the first column called Event and click on the dropdown menu to add a Rate Change to the loan. Once you changed the rate, all subsequent events will be calculated at the new interest rate.

### Can I have a payment(s) in advance?

Yes you can and this is a common setting for leases. In TValue, you can also designate multiple payments in advance by using 2X for two payments in advance or 3X for three payments in advance in the amount cell.

For TValue 6, go to File/Options/Cash Flow/Default second event date same as first and check the box. This will change your default so that all future schedules will have the first payment on line 2 with the same date as the first line item. If you have already started the schedule, you can change the date as needed for the advanced payment. A short cut is to do shift and type the letter "M" for month when you are on the date cell and the program will move the date back one month.

For TValue Online, go to More/Input Setup and then to Same date as second cash flow line and check the button. If you would like to change your default so that all future schedules will have the first payment on line 2 with the same date as the first line item, click Save as default.

For TValue 5, you can go to Setup/Input Setup/Date of second cash flow line/One period after first cash flow line and check the button or you can also press F5. If you want your first payments in advance for all future schedules, you can click on Save setting on the bottom left hand corner in the TValue Setup window.

### Why are my numbers different than what the bank says?

There are many different computational methods that may affect the numbers. You can have different combinations between compound periods and the year length that can cause slightly different calculations. Although loans may have monthly payments, there are different ways to structure a loan. A common loan structure is monthly compounding with a 365 day year. Loans can also be structured with actual days over 365 days. In TValue software, you would set compounding to Exact days and use a 365 day year. You could have actual days over 360. The setting in TValue software would set compounding to Exact days and the year length would be 360 days. There are other variations but these would be the most common.

### How can I be sure the calculations are accurate?

TValue software is time tested. TValue software has been the industry standard for amortization since 1984 and is used in financial industries all over the world.

### Can I calculate the yield on a bond?

Yes, type “U” for Unknown for the Nominal Annual Rate. Enter the purchase price as Invest event. Enter interest payments as Return events. Enter face value of the bond as last Return event. Calculate. Nominal Annual Rate is the yield. (Please note that many bonds are generally setup with a 360 day year.)

### How do I calculate the payoff?

There are multiple ways to calculate the payoff of the loan:

• You can simply create a final payment and type “U” for the amount and click calculate. (You need to delete any payments that were not made.)

• You can use the Balance function under the Compute menu, or click on Ctrl+B, to calculate the payoff at any point in time.

• You can enter a Payment event of $0 on the desired date. Then go to the Amortization schedule tab. On this payment, you would have the interest from the last event and a new balance which would be the payoff balance.